Apple Fades, Foxconn Teams With Nvidia On AI Future Amid Trump's Policy Moves—'Grown From Its Legacy Business'

Foxconn, owned by Hon Hai Precision Industry HNHPF, the prominent supplier for Apple Inc. AAPL, has seen its AI server division overtake iPhone assembly as its primary business.

AI Servers Now Outshine iPhone Assembly At Foxconn

Foxconn’s Cloud & Networking Products division has, for the first time, outpaced its Smart Consumer Electronics division, which oversees iPhone assembly, in terms of revenue. In the second quarter of 2025, the Cloud & Networking division’s revenue surged by 47% year-over-year to NT$731.8 billion ($24.32 billion), surpassing the NT$634.5 billion ($21.08 billion) generated by Smart Consumer Electronics.

AI servers now account for over half of cloud revenue, after posting more than 60% growth in the second quarter. Foxconn expects AI server revenue to surge 170% year-over-year in the third quarter, fueled by rising demand from hyperscale cloud providers.

“The company has grown from its legacy business of building smartphones or assembling computers for the likes of Apple to being a critical player in not only AI servers but also in emerging new product categories such as EVs and humanoid robots,” stated Barclays analysts, as reported by Business Insider.

Meanwhile, Foxconn is ramping up AI server production in the U.S.—with sites in Texas, Wisconsin, and planned facilities in California and Ohio to hedge against geopolitical and President Donald Trump’s tariff risks. The company is also branching into electric vehicles, semiconductors, and healthcare robotics.

Nvidia Partnership Fuels Foxconn’s AI Ambitions

Apple, once Foxconn’s primary growth driver, is no longer its most important customer. Foxconn is rapidly establishing itself as a heavyweight in AI infrastructure, expanding its market share in AI servers and collaborating with partners like Nvidia NVDA on next-gen server architectures and humanoid robotics integration.

In March, the company announced its in-house large language model with reasoning capabilities, developed using Nvidia technology, as part of its diversification into AI and electric vehicles, as reported by Benzinga.

This shift in Foxconn’s business model could also have wider implications for the tech industry, potentially sparking a shift in the ETF universe. Foxconn’s pivot to AI servers could potentially impact the performance of ETFs, particularly those heavily invested in AI and data center like Roundhill Generative AI & Technology ETF CHAT or the ones heavily invested in Taiwan like iShares MSCI Taiwan ETF EWT.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.